Why was Bank of America allowed to transfer $75 TRILLION in risky derivatives into FDIC protected parts of its operations on Obama's watch?
BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit
Oct 18, 2011
'Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.
'The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
'Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades. '
'The Fed ... ended an exemption for Bank of America in March 2010 and in September of that year approved a new one. '
Not only is this driving up costs to depositors, it will come nowhere near to covering FDIC's actual losses when derivatives go belly up in the next meltdown.
Democrat are not content to bankrupt Fannie Mae and Freddie Mac. Now they will bankrupt FDIC.
ANOTHER TRIUMPH OF THE AMERICA WRECKERS